Monday, July 04, 2005

The US Opium Trade, Hong Kong and Taiwan

Given that today is the Independence Day holiday of the United States, it seems appropriate to reflect on the role American merchants had in the opium trade that brought the city of Hong Kong into existence. We have so far focused on Scotsmen like Messrs. Jardine and Matheson, but American merchants played a significant, and over time, increasing role in Western commerce with China. While they were considered 'minor league' in the 1830s, during the heyday of William Jardine and his clipper ships, they were anything but by the turn of the twentieth century.

The first American opium clipper to have made it to Chinese shore was the Empress of China, in 1784, having made it past the hazardous turn of Cape Horn. The American merchants were in the minority, given the early headstart of the British East India Company and the 'country traders' that accompanied them, whom bought the opium from the British East India Company in Bengal and shipping it to an increasingly large market in China. 'John Company', as the British East India Company was known, did give preferential treatment to British country traders, so the Americans were quick to find an alternative source of opium - in Turkey, called 'Malwa' opium. The largest importer of this opium was Russell and Company.

Russell and Company was one of the largest opium trading firms on the China coast, founded by one Samuel Russell of Massachusetts (his cousin William Huntington Russell, benefiting from the money in the family, set up the Skull and Bones society at Yale University). Russell had an exceptionally good relationship with the Cohong merchants at Canton that held an oligopolistic license to deal with the Western traders. In particular, he had an excellent relationship with Howqua, who is believed to have been the single wealthiest individual in the world at around 1840. It is said that Russell helped Howqua make numerous investments overseas, including in the burgeoning business of railways in the United States.

During the Opium War, the Americans generally kept a low profile, choosing to deal in non-opium products rather than risk war against the Chinese; at this time, the American government was very much against a forward policy in China. While President Andrew Jackson in the 1830s was for developing a new relationship with China, he was not prepared to exercise force to make it happen. American merchants too, preferred not to have strong direct American consular supervision in China, as they feared for their independence.

Nevertheless, after the conclusion of the Opium War and the Treaty of Nanking, many began to envy the large number of special privileges that China had granted to Great Britain. Consequently, American negotiators in Macau concluded an agreement with the Chinese in 1844, the Treaty of Wangxia, that granted Americans access to the same ports as the British. One consular official in the 1850s (he had also been involved in the drafting of the Wangxia Treaty), one Dr. Peter Parker, aggressively suggested that America should also acquire a port of their own, as the British had done with Hong Kong, and suggested Taiwan as the ideal location. What would modern nationalist Chinese activists make of that suggestion today?

Fortunately for twenty-first century US-Chinese relations, not only was that suggestion disregarded, but President Franklin Pierce recalled the maverick Parker in 1857 as a result. American diplomacy in Hong Kong and China was relatively low-key for the rest of the century, until the Open Door policy in 1900 that prevented China's carve-up into explicit colonial dominions by Western powers.

However, American merchants continued to flourish in Hong Kong and along many of the treaty ports of China, and I shall close this entry with an anecdote about one of the partners of Russell and Company, a staunch Republican named Warren Delano. A descendant from a French Huguenot family that had come over with the first American settlers, he was part of a Boston Brahmin family. He certainly enriched his familial wealth though, with his trade in opium. He was famous for his deep disdain of Democrats, having once said: "I am not saying that all Democrats are horse thieves, I have only observed that all horse thieves are Democrats." The irony of course, is that Warren Delano's great-grandson, Franklin Delano Roosevelt, was indeed a Democrat, and the longest-serving President of the United States. Perhaps he had wanted to erase his ancestor's role in the opium trade, when he readily agreed to Chiang Kai-Shek's demand for Hong Kong's return to China above Churchill's vociferous protests?

(Photo above of Warren Delano Jr. in Hong Kong, courtesy of National Archives).


Anonymous said...

Now we know why FDR was pro China and a good friend of Chiang.

Dave and Stefan said...

Yes, rather, perhaps FDR was after all the proto-type bleeding heart liberal that felt it necessary to atone for past misdeeds...or perhaps he, like other Democrats, took an idealistic, Wilsonian view to international justice and the world order. The greatest evidence of that, of course, was his suggestions for the founding of the United Nations, a stronger version of the toothless League of Nations.